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Spiff vs CLV in the channel

Posted by Peter Radizeski on Dec 5, 2017

Customer Lifetime Value is better for your business than 3X SPIFF

By Peter Radizeski

Why do customers leave? 68% leave due to poor customer service. The next 14% leave because they are dissatisfied with the product. 

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That means that your business hinges on supporting your customer. We all know this, but we also rely heavily on the vendor to handle the bulk of the customer support. In fact, more and more we rely on the vendor for the bulk of everything post ink.

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Image credit: Entrepreneur Magazine https://www.entrepreneur.com/article/270362  

After the contract is signed, partners naturally move on to the next deal. They also assume the vendor will contact the customer and begin the deployment and on-boarding processes. Yet, is that often the case?

More of the burden for all aspects of the customer experience is falling on the partners – before and after the sale. 

While prices compress along with the recurring commissions, partners are spending more time on customer support than on sales. Sales cycles are longer due to the complexity of the sales. All of this puts pressure on the partner. 

Those SPIFF start to look good. The vendor paying more gets more attention. That is all well and good for the short term bottom line, but what about long term?

Good customer support leads to higher customer lifetime value and referrals (if you ask for them). 

Partners have to examine what vendor is delivering on customer experience, not a 3x SPIFF. 

And if the vendors across the board are lacking in service delivery perhaps the partner needs to get help. That help can come in many forms. One of which is to seek out a specialty master agency like COLOTRAQ for data centers or LANTelligence for CCaaS and UCaaS. 

These specialty masters bring years of expertise, industry resources and long-standing vendor relationships that can make a difference in the customer experience. These masters have engineering and project management assistance to buffer the vendor deficits. 

There are other ways to go like virtual assistants or 1099-contractors on a project basis that the partner can hire and manage to fill the voids in. 

One of the values that partners have always brought to the customer’s table was the capacity to take the telecom out of the way of the customer. LNP, FOC, RESPORG, coordination, PBX mapping, phone trees and more are important details for a successful deployment, but are nothing more than a nuisance to the customer. Partner value lays in a successful deployment so someone has to mind these details. Who in your organization is responsible? Do you have a project manager or coordinator? Do you have someone detail oriented enough to see these customer projects through in order to get more wallet share and referrals from the customer?

In a transactional relationship like long distance and bandwidth, getting the ink and moving on to the next sale worked as a business model. With the complexity of cloud deals – UCaaS, contact center, AWS, SD-WAN and the like – and the lengthy sales cycles, is this still a transactional relationship? 

When selling replacement services at a cost savings, the partner likely isn’t concerned with lifetime customer value. It is more about sales volume and quick ink. Cloud sales are different. They are more complex. They take longer. Buyers have to trust the partner, the vendor and the outcome of the service offering. That is more than transactional. That is why partners have to re-examine who they partner with and why. 

A PRI was a PRI no matter who delivered it; same with a T1. There is no longer a box on premise to plug into. The landscape has changed. Has your business changed with it?

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About Peter Radizeski

Peter Radizeski is an accomplished blogger, author, agent and consultant in the telecom industry. He has helped many telecommunications companies with sales training, marketing, channel development and business strategy. He is a trusted source of knowledge about the telecom sector. 

http://rad-info.net/ 

Topics: Channel trends